NTPC withdraws notice for discontinuing power supply to BSES

According to a statement released by BSES, it had written to NTPC on amicable settlement of the payment issue and the regulation notice stands withdrawn.Debjoy Sengupta | ET Bureau | May 18, 2016, 21:21 IST

KOLKATA: NTPC has withdrawn its notice for discontinuing power supply to BSES which caters to Delhi.

"Payments by BSES utilities have become irregular for quite some time and had crossed Rs 1,300 crore in April. Following this NTPC had served a notice to stop supplying power from May 10," said NTPC officials.

According to a statement released by BSES, it had written to NTPC on amicable settlement of the payment issue and the regulation notice stands withdrawn.

Following the notice BRPL had proposed a payment schedule liquidating outstanding dues to NTPC till September. Earlier this week further discussions were held between BRPL and NTPC and an amicable settlement was arrived at with respect to a payment schedule of outstanding dues and the regulation notice was withdrawn.

NTPC has been supplying power to BSES Rajdhani Power Ltd (BRPL) & BSES Yamuna Power Ltd (BYPL). According to a NTPC statement, power allocated to BRPL by NTPC from various power stations is about 1,350 MW and average monthly bill hovers around Rs 260 crore. NTPC supplies about 678 MW of power with an average monthly bill of about Rs 130 crore. Total monthly bill for both companies is about Rs 390 crore.

According to BSES it has made 90% of payments to NTPC. In the last two years, BSES discoms have paid in excess of Rs 9,500 crore to NTPC. The payment of dues to power utilities by BSES discoms is subjudice and the judgement has been reserved since February 2015.

BSES said that since 2002, Delhi discoms' cost of buying power has increased by around 300%, on which they have no control. However, the retail tariff has increased by around 90% in the corresponding period. BSES's is under huge financial stress due to non-liquidation of regulatory assets estimated to be over Rs 16,000 crore as of March 31, 2016.

Around 85% of total discom cost is power purchase cost, which is uncontrollable by the discoms. Delhi gets nearly 95% of its power from Central & State power generating stations whose tariffs are determined by CERC and SERCs respectively.

"While Delhi's bulk power rate is 60% higher than the national average (Rs 5.49 per unit Vs Rs 3.49 per unit), power from Delhi's own state generation plants is over 70% higher than the average cost from other state generators (above Rs 6.00 per unit Vs Rs 2.93 per unit)," BSES said.